After weeks of speculation, Argentinean President Cristina Fernández de Kirchner announced that her government is going to nationalize the Spanish Repsol subsidiary YPF, declaring that her country’s hydrocarbon industry was a sector of “public interest.”
Argentina's move to seize control of this Energy
Company, will probably hurt in short terms the investment in Latin America. The impact
of the intervention of YPF in
investments Argentina will be negative and will
reinforce the negative view of certain countries such
as Venezuela, Ecuador and Bolivia because the
nationalization of their industries are inefficient. In the long run,
I believe they will not have an impact on the region, at
least, Chile, Brazil, Peru, Colombia, Mexico
and Uruguay have taken more serious attitude
and consistent attitudes.
Concerning this controversy in our region, The General
Secretary of the Union of South American Nations (UNASUR),
Maria Emma Mejia, said today in Brazil his "respect"
for Argentina's decision to expropriate 51% of Repsol YPF describing the
move as an "internal affair".
Gladly, Peru's foreign minister speak on the issue: "We respect but do not
share the position of the Argentine government" Peru is
"a country with stable and clear rules".
The Argentinean Government will
reimburse YPF for its shares? the price of compensation for the
expropriation of 51% of YPF. Brufau (YPF) claimed 10,500
million dollars (8,000 millions of euros), while Kicillof
(Argentinean Economy Vice- Minister, the intellectual author of the YPF expropriation) seemed to
shoot down the numbers saying the company owes 9,000 million dollars
and threaten to charge the alleged environmental damage.
On the expropriation in Peru,
the Constitutional Law states that no one may be deprived of his
property but solely because of national security or public
necessity, declared by law, upon the payment in cash compensation, including appraised
value compensation for the damage incurred.
It also indicates how it should be the procedure of expropriation: there must be a prepayment or an advance payment of the compensation that includes any damage (economic damage and moral damage) affected and the right to appeal to the court if the “injured” does not agree with the appraised value or valuation of the expropriated property.
Considering that the concept of public necessity is defined as the satisfaction of a requirement for a community, unlike Perú, Argentina's case, does not support the advance payment of compensation to the detriment of an expropriation.
It also indicates how it should be the procedure of expropriation: there must be a prepayment or an advance payment of the compensation that includes any damage (economic damage and moral damage) affected and the right to appeal to the court if the “injured” does not agree with the appraised value or valuation of the expropriated property.
Considering that the concept of public necessity is defined as the satisfaction of a requirement for a community, unlike Perú, Argentina's case, does not support the advance payment of compensation to the detriment of an expropriation.
Peruvian Business Legal Adviser
xthianc@gmail.com
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